Culture Happens – Is Yours By Design or By Default?
Robin Benoit
January 10, 2024
Corporate culture is an often understated but crucial driver of performance in the dynamic realm of business. As we enter the age of artificial intelligence, and the need to adapt faster than ever, the impact of culture becomes magnified.
As a business leader, you don’t get to decide if your business has its own corporate culture – you can only influence if that culture arises by design or if it’s simply what happens when nobody is paying attention.
Intentionality in Culture Building
The essence of a thriving corporate culture lies in its deliberate creation.
A study by McKinsey & Company revealed that only one in three organizational change efforts succeeds. While this underlines the challenges in shifting culture, success is possible. Positive culture change lies in being purposeful in change management and ensuring leadership behaviors align with the culture you seek.
At Microsoft, for instance, CEO Satya Nadella successfully shifted the internal culture from competitive to collaborative and innovative. He did this by adopting a 'growth mindset' philosophy, where employees could learn from failures and view challenges as opportunities to improve. Microsoft also embraced cloud computing and open-source technologies, which required a cultural shift towards more openness and adaptability. This pivot rejuvenated a culture once known for silos and infighting, and contributed to substantial annual increases in the value of Microsoft stock since Mr. Nadella became CEO.
Leaders set the tone for the entire organization and their actions speak louder than their words in shaping the culture.
Alignment with Mission
Alignment of management and employees with the company’s mission is another crucial aspect of culture by design.
One interesting example was Genentech’s Immunology and Ophthalmology division, following its acquisition by Roche Group. By aligning the culture with four specific pillars – patient orientation, focus on people, courage/innovation, and integrity – and translating these into specific behaviors and outcomes, they managed to create a culture that is aligned with their mission. Most importantly, they managed to exceed their goals within a year, showing how alignment with mission drives performance by fostering a sense of shared purpose. When everyone in the organization is working towards the same goal, success follows.
Consequences of a Default Culture
Conversely, many cultures “happen” when leadership isn’t paying attention. Culture by default can often lead to negative outcomes, like the case of once-giant corporation, Kodak. Kodak's culture, steeped in its success in the film industry, failed to evolve with the digital revolution. Despite having the technology for digital photography, the company's rigid, complacent culture and resistance to change, led to its eventual demise. This lack of adaptability in the face of technological advancements is just one example of how an unmanaged culture can make or break a business as the landscape evolves. Building a culture that embraces change and innovation is increasingly important in the modern age. Consider the impact of artificial intelligence on your workforce – either you can resist like Kodak, or embrace it as a part of your company’s future.
Creating Your Culture
So how do you design the thriving, diverse, and inclusive culture you aspire to have? First and foremost, engaged employees are at the core of a successful culture. A lack of engagement results in a dispassionate workforce, hindering performance and innovation.
To get that engaged workforce and healthy culture, there are many factors, but start by focusing on a few key areas. First, open and transparent communication are critical. Effective communication fosters trust and alignment, while poor communication can lead to misunderstandings, mistrust, and fragmentation.
Second, don’t disregard the importance of appropriate recognition and rewards. Misaligned reward systems can encourage undesirable behaviors and contribute to a toxic culture. With intentional planning and aligned leadership, you can build recognition and rewards programs that encourage the behaviors of the culture that your company, and your employees, are seeking. When crafting your rewards programs, remember it’s not just the “what” but the “how” that requires recognition.
Lastly, do not lose sight of adaptability. Organizations that adapt to internal and external changes tend to thrive. How will your workforce not only survive, but thrive, in the new world of artificial intelligence? Inflexibility can lead to a culture that is misaligned with the market, technology, employees, and customers. Don’t let a default culture hold you back. Design the kind of culture that top talent seeks to be a part of, and superior business results will follow.
Robin Benoit is the President, CEO and Co-founder of Benoit Global, a global consulting firm focused on maximizing business performance through optimizing corporate culture.